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development of a 201-unit multi-family residential rental housing project (the <br /> i "Development") intended for occupancy'by individuals of low and moderate <br /> income on the land described in Exhibit A hereto (the "Land") by LaNel. <br /> E. The HRA determined that redevelopment of the Project Area and <br /> construction of the Development pursuant to the Redevelopment Contract were in <br /> the best interests of the City and benefited the health, safety, morals and welfare of <br /> its residents. <br /> F. Prior to execution of the Redevelopment Contract, the HRA and the <br /> HRA's financial consultant calculated projections of the necessary tax increment to <br /> be generated in the Development to ensure that the bonding to be paid with the tax <br /> increment would be retired as anticipated. The amount of tax increment projected <br /> by the BRA was based upon real estate taxes estimated to be $1,200 per apartment <br /> unit in the Development. <br /> G. Throughout the discussions leading up to the preparation and the <br /> execution of the Redevelopment Contract (and in prior discussions with other <br /> potential developers of the Development), the parties assumed that the property tax <br /> per apartment unit in the Development would be approximately $1,200. These <br /> projections were made based upon the 1988 state property tax rate classifications. <br /> Since 1988, the Minnesota legislature has modified the system in a way which has <br /> resulted in an increase in the per unit property tax expenses. <br /> H. Construction of the Development has been completed by LaNel. The <br /> projection for the 1991 tax increment derived from the Development was $211,000, <br /> and the projection of the 1992 tax increment derived from the Development was <br /> $221,100. In actuality, the amount of the tax increment derived from the <br /> • 2 <br />